Yale New Haven Health System announces two potential and significant alliances

YNHHS has announced that it has signed a letter of intent (LOI) to create a new strategic partnership with Vanguard Health System that will combine Yale New Haven Health System's world-class quality of care, access and efficiency and Vanguard's management expertise, resources and capital.

Under the proposed strategic partnership, YNHHS and Vanguard would remain separate organizations but would create a new company dedicated to aligning selected hospitals and physicians in the region. It would establish a model that allows YNHHS to compete in the rapidly changing world of health care.

Importantly, under the LOI, Yale New Haven Health System and all of its delivery networks — Yale-New Haven Hospital, Bridgeport Hospital, Greenwich Hospital and Northeast Medical Group — would remain not-for-profit.

"The healthcare environment continues to challenge hospitals and healthcare systems across the U.S. and we must consider unique approaches to organizing the way we offer access to high-quality care," said Marna P. Borgstrom, president and CEO, Yale New Haven Health System. "Reimbursement from federal and state payors continues to decline rapidly so it is vital that we look for innovative, cost-efficient ways to continue our mission."

On August 8, 2013, the Eastern Connecticut Health Network (ECHN) announced that it had signed a separate letter of intent to explore an affiliation with YNHHS and Vanguard Health System. ECHN is a non-profit healthcare system that serves 19 towns in eastern Connecticut.

Its network includes the 249-bed Manchester Memorial Hospital and the 102-bed Rockville General Hospital, and other affiliates including a rehabilitation and nursing center and a women's wellness center.

Under the terms of ECHN's LOI, the Vanguard/YNHHS strategic partnership would purchase the assets of ECHN and invest the capital necessary to ensure its delivery of care. Vanguard would manage and operate both hospitals and YNHHS would provide ongoing clinical support, as well as quality and service line management.

In both transactions, the LOI represents the first of many steps that the organizations must go through. Ultimately, the LOI leads to a definitive agreement that, once signed, would initiate a broader regulatory review by appropriate state and federal agencies.

"We must meet the current healthcare environment challenges with creative and untraditional approaches. Partnerships like this will further our efforts to enhance access and care quality and invest in the health of the communities we serve," said Borgstrom. "This is expected to enhance our commitment to realizing YNHHS's mission to innovate and achieve excellence in patient care, teaching, clinical research and community service.

"Organizations of all sizes and strengths are looking to create the partnerships that will allow them to continue to serve patients and communities," said Borgstrom. "YNHHS is a strong and thoughtful organization that will continue to forge alliances that allow us to enhance the scope of the care for which we are well known.